by Barry A. Liebling
How much should an airline charge you to stow your carry-on baggage in the overhead bin? In a free country the answer is determined by voluntary back and forth bargaining. The right price is the amount that is satisfactory both to you the passenger and the airline. As always, the government has the important role of protecting individual rights – assuring that there is no force or fraud in the negotiations.
Recently Spirit Airlines management got a lot of attention when it announced that it will begin charging passengers from $25 to $45 for the privilege of using the overhead bin. There will be no additional fee, however, if you fit your luggage under the seat in front of you. The idea, according to Spirit, is to unbundle its services. Passengers who do not need to use overhead storage will not have to pay for it.
My first reaction to Spirit’s announcement was mild irritation. I do not generally enjoy the flying experience, I make use of overhead bins, and I do not want to pay more for my travel. But I immediately saw that I am not necessarily trapped. There are other airlines besides Spirit. If people are annoyed by carry-on fees, Spirit’s competitors will snatch its customers by bragging that there is no extra charge for using their bins. Aside from what competitive airlines might do, if Spirit customers complain about the new fees, Spirit may abandon its new idea because it is unpopular.
It is interesting to note that the president of Spirit asserted that its deeply discounted fares will make flying with the airline less expensive than alternative airlines, even after the carry-on fee is taken into account. If true, I might calculate that paying to use the overhead bin is on balance a bargain.
Notice that in a free, competitive market the fair price is arrived at by mutual consent. Passengers and airlines work out the terms and prices themselves without the “help” of outside busybodies.
Charles Schumer, the senior Senator from New York, understands very well how free markets determine prices. However, Senator Schumer has antipathy for the market process because it has two problems. One problem is that with mutual consent the bargaining parties might come to an agreement that is not what Senator Schumer would have chosen. The airline might charge more than the Senator thinks is right, or less than he thinks it should and be guilty of “predatory competition.” The other, more telling, problem is that free markets cut the strong hand of government out of the picture. Senator Schumer wants to be the decider when it comes to airline pricing.
After Spirit management made its announcement Senator Schumer staged a public tantrum. He called the new proposed fee “a slap in the face to travelers.” He positioned himself as the champion of passengers by proclaiming they have a right to stow luggage in overhead bins “without having to worry about being nickeled and dimed.” Apparently he said nothing about eliminating or reducing the 7.5% federal tax on all domestic airline tickets. Why does this not count as a slap in the face?
Senator Schumer called top airline executives on the carpet demanding that they publicly pledge to refrain from charging for carry-on baggage. In short order the managements of American, Delta Air Lines, United Airlines, US Airways, and JetBlue Airways made verbal commitments to comply with the Senator’s order. As of this writing the President of Spirit Airlines has not yet reached an agreement with Senator Schumer.
Note well that the ritual of having airline executives kowtow to Senator Schumer is a significant gesture. The real issue is not whether or how much airlines charge to use overhead bins, it is that private companies are compelled to play “Mother May I” with a powerful official who has the ability to make life miserable for “disobedient pupils.” Senator Schumer is displaying a statist mentality that rejects the right of private business to operate privately. For him all business decisions should be subject to the approval and guidance of the government.
How much should an airline charge you to use the overhead bin? Suppose the government decides on its own and tells both you and the airline to shut up and obey. What does this tell you about the government and citizens who sanction this abuse?
*** See other entries at AlertMindPublishing.com in “Monthly Columns.” ***